Product Naming Case Study: The 3DS

Naming products is a difficult process. An ideal name is short, memorable, an undisputable trademark, has no easy way to mock it, doesn't mean something bad in common languages, and it embodies the key features and positioning of the product. It's an extraordinarily difficult feat to achieve all of those goals, and correspondingly rare. Usually names fall short, sometimes far short, of more than one of those points. Even less-than-stellar product names can take many hours of work to create and approve.

One aspect of of product naming is that a product name can also turn into a negative factor, sometimes merely by chance. Usually this happens when you move a product to a foreign country and find the product name doesn't work. A classic example is GM trying to sell the Chevy Nova in Latin America, but "no va" in Spanish means "it doesn't go", which is a less than useful association for a car.

Nintendo's most recent hardware has had some interesting names. Back in the early days, they stuck to pretty straightforward names that were easy to remember and obviously had no trademark problems: The Nintendo Entertainment System (NES). The Super Nintendo Entertainment System. The Nintendo 64. All had the company name as part of the product name, so it was clear what company was making it. These products reinforced the meaning of Nintendo as a key gaming brand. Although the N64 didn't really say it was a game machine, by this time the word Nintendo was so strongly associated with gaming the point was made.

Next up was the GameCube, which was descriptive to a fault. It really wasn't an exciting or evocative name, and didn't point to any product benefits. Yet Nintendo's brand by this time was plenty strong enough to compensate. Subsequently, Nintendo choose to find a readily trademarkable name that had some unusual resonances: The Wii. This was probably the most radical name in Nintendo's history, and it attracted a great deal of commentary (much of it negative). Again, though, the power of Nintendo's brand carried the company past any negatives, and the best-selling hardware shut up detractors pretty quickly. After all, if it was selling like hotcakes who cared what they called it?

The Gameboy was a little bit odd for America, but the overwhelming success of the product eventually transcended the relatively weak name. (Weak because it really didn't point to any product benefits, and seemed a little off-putting to half the potential audience.) The Nintendo DS was a fairly obvious name to point to the device's main differentiation: the dual screens.

Now we come to the Nintendo 3DS. I'm sure that when Nintendo was working on the prototypes, and somebody said "What will we call it?" somebody quickly suggested "Nintendo 3DS!" Sure, the device has glasses-free 3D display, and it's basically an advanced version of the DS. At that time, too, 3D was making a resurgence. James Cameron's Avatar was setting box-office records, and the movie industry was making plans to have 3D in every theater, with every movie being in 3D, as a way to get people to come back to theaters to get something they couldn't get at home. (And, not incidentally, charge them a lot more.) Meanwhile, TV manufacturers realized they might have a way to get people to buy new TVs even though they might have just bought an HDTV in the last year or two. And game publishers, watching console game sales sinking, saw the possibility for a new technology that could revive game sales and be relatively easy to add on to existing consoles.

Nintendo was in desperate need of a sales boost, too. A new handheld device riding the wave of 3D enthusiasm seemed like the perfect answer. What better way to ensure that the device was associated with the 3D craze than to put 3D in the name?

The upside to the 3DS name seemed clear: The name clearly associates the device with 3D, and thus with the enthusiasm for 3D being generated by the movies, TV makers, and the game industry. So the 3DS name should help boost sales by some amount. Perhaps no one even mentioned the possible down side: What if 3D turned out to be just a fad? Or, worse, if 3D actually turned out to be a negative feature for customers? Then the name might be a drag on sales, reminding customers of a feature they don't like or don't care about, and making it seem like the device is all about that feature.

Of course, this is exactly what has happened. Satoru Iwata realized this early on, and noted in public statements that the device wasn't all about 3D and that you could have non-3D games on it. But if you leave your little 3D slider in the off position on the 3DS, you're left with a DS that is clunkier than a DS Lite and has about 1/3 the battery life. At least, it still has more horsepower, and when you're not using 3D the main screen is a fairly high resolution. The lower price tag is going to help significantly, too, by showing that you can get the extra features with paying a huge amount more than you would for DS.

I expect that a new version of the hardware is in the works, at least to make it less expensive to produce, and possibly to add a second analog control, improve the battery life, and maybe make it slimmer and lighter. This is a natural evolution that console maker inevitably work on (at least, the part about making the device cheaper to produce). I think Nintendo will be looking closely at possibly rebranding

This is a cautionary tale for marketers, though. Naming is a two-edged sword; think carefully before you hitch your product's success to single feature or a pop-culture craze. That may be OK if your product is only going to be on sale for a few months, but if you expect to be selling something for years you need to take a longer view. A blander name might not give you an initial sales boost, but it may also avoid a sales problem. Nintendo's done pretty well in the past with names that are not terribly exciting in and of themselves, but they let the quality of the product add value to the name. And some solid marketing spending, too. Marketers, take heed.

Latest Nintendo Rumors: 3DS Lite?

If only we could see inside Nintendo this easily.

While we await the results of Nintendo's price-slashing experiment with the 3DS, some rumors (courtesy of Bloomberg Japan) have surfaced, claiming that Nintendo is planning a big announcement in September, perhaps prior to the Tokyo Game Show. Nintendo's stock has risen almost 10% in the last few days, which certainly might indicate that something is up. Adding fuel to the fire is this report on French gaming site 01net.com, which claims to have heard from a source inside Nintendo the following things:

1) Nintendo is planning an add-on second analog control for the 3DS, which would retail for about $10.

2) 3DS dev kits have about a 6-month backlog, so Nintendo is outsourcing the production in an attempt to get them out faster.

3) Nintendo, realizing that the whole 3D craze has flamed out, is planning to de-emphasize the 3D display, possibly even rebranding the 3DS.

4) Nintendo is planning a new 3DS for release next year... which would radically tone down the 3D aspect, a new design and possibly the new branding.

While Nintendo may be about to make a big announcement in September, I'm sure it wouldn't be about any new hardware. I seriously doubt they would want to do anything that might hurt holiday sales. I'd expect some announcement of additional marketing efforts, perhaps some free software pack-ins or downloads, and maybe an announcement of big marketing spending over the holidays. I think Nintendo will want to push the 3DS as hard as possible this holiday season (I'm already seeing new TV commercials pushing the lower price and the software titles coming soon), to maximize the sales.

Nintendo probably realizes just how dire the situation is for the 3DS. If they can't show strong sales over the holidays, with a radically lower price tag and with Zelda, Mario, Mario Kart and Starfox all hitting the stores, you can bet 3rd-party publishers will be spraining a finger pushing the abort button on current or planned 3DS development. If the 3rd-party publishers head for the PS Vita or smartphones (or both), the 3DS has almost no chance of being a big success.

I suspect Nintendo is hoping to demonstrate at least strong sales this holiday season, if not stellar sales. Then early next year they can keep publishers excited by telling them about the new version of the 3DS, where they fix all the perceived problems (make it smaller, lighter, longer battery life, 2nd analog control) and relegate the 3D feature to a minor role (since it doesn't seem to be a huge draw for customers; if anything, it might be keeping moms away from buying it over concern for their kid's eyesight).

Nintendo won't want to make any public announcement of a new version of the 3DS until just before it ships, or else sales would probably totally collapse. They might, however, want to float a few trial balloons in the rumorsphere, just to see what the response is among publishers and customers.

I think shifts in the hardware and the marketing emphasis might help, but the real problem is with Nintendo's business model. The problem of dev kits being back-ordered 6 months is a huge one for the future of the device. No dev kits, no development... which means fewer titles, which means less software to attract buyers. The fact that Nintendo still wants to charge about $4500 for a dev kit shows they still don't understand the value in having a lot of titles out there. (Microsoft charges $99 for an XNA sub to allow you to make Xbox indie games, for instance; Sony's charging $2700 for a PS Vita dev kit.) Nintendo really needs to open up development, and put some serious effort into digital distribution, if they want to have a chance.

I note that Sony recently stated that all PS Vita titles would be available through digital distribution as well as in retail stores. Which may not make GameStop all that happy, but it's certainly a plus for customers. Nintendo has yet to make any substantive moves in this direction; if anything they've said they aren't all that interested in online stuff.

This is all happening as excitement is building prior to Apple's introduction of a new iPhone model. Rather, two new models; a new one with a faster processor, bigger screen, and better camera, the usual yearly advancement everyone expects. The real winner, though, is the other iPhone that's looking more real: The iCloud iPhone, which is essentially a cost-reduced iPhone 4 with only 8 GB of flash storage that can use Apple's new iCloud service for streaming music and video. This may be so low cost as to be free with a 2-year contract with AT&T or Verizon. If that's true, we're talking an even greater threat to the 3DS and the PS Vita.

Yes, yes, I know smartphones don't play the deeper, richer games you find on consoles... yet. But everyone needs a phone, and when you leave the house you'll always carry that, for sure. If you have a smartphone that plays some pretty nice games (that are mostly free or only a couple of bucks), you will be much less inclined to drop hundreds of dollars on a dedicated gaming device where the games cost $40 apiece. You'll certainly be much less inclined to buy a dedicated handheld gaming device for your kids when you will really want to make sure they have a phone first. If a really cool smartphone is $0 when you sign a 2-year agreement... hey that sure looks attractive. No wonder handheld software sales having been dropping for the last 3 years straight.

And as smartphones become even more popular, and their graphic capabilities equal or exceed consoles, we'll see more of the key console hits coming to smartphones. I'm not surprised at all that Nintendo might be getting a little desperate. I just hope they start applying their talent for disruptive innovation to their business models, and not just their hardware designs.

PS Vita Vs. 3DS, Round Two

The battle will begin soon...

Sony has now published the specs for the PS Vita, and now we can do a head-to-head comparison of the hardware.

PS Vita CPU: ARM(R) Cortex(TM)-A9 core (4 core), GPU: SGX543MP4+.
3DS: ARM 9 CPU at 133 MHz, ARM 7 CPU at 33 MHz,  DMP Pica 200 at 200 MHz

What does this mean in terms of performance? For the CPUs, the PS Vita's ARM 9 4-core variant can deliver somewhere between 8,000  and 20,000 Dhrystone MIPs (millions of instructions per second), depending on the clock speed (which is nominally 800 MHz but could be varied dynamically, but at the cost of greater power consumption). The 3DS is running its CPU at 133 MHz, and it's only one core; the second CPU is probably dedicated to running the second screen. Exact comparisons are difficult, but it's safe to say the PS Vita is at least 5x as powerful as the 3DS when you look at the CPU power.

For the GPUs, the 3DS delivers about 15 million polygons per sec, while the PS Vita should hit around 133 million; the pixel fill rate for the 3DS is 0.8 gigapixels per second, while the PS Vita delivers about 4 gigapixels/sec. Obviously we can't run the same benchmarks on both sets of hardware to see how this translates into actual game performance. Again, though, the PS Vita is clearly more powerful, at least 5x as much as the 3DS.

Both devices have an array of controls and sensors, though the PS Vita has the backside touch panel and multitouch capability on the front screen. The 3.5 inch main screen of the 3DS is nice at 800 x 240 (400 x 240 in 3D mode), but pales in comparison to the PS Vita's 5 inch 960 x 544 OLED display.

The most important final stat: Price. The 3DS is now the clear winner at $169.99, with the base model of the PS Vita coming in at $249.99 (you can pay $299.99 for 3G capability).

The software lineup is strengthening for the 3DS, with some key franchises (Mario, Star Fox) coming this holiday season. The PS Vita lineup will no doubt be solid, given that Sony has watched Nintendo's problems with having the hardware shipping without any notable software titles.

The real issue is how well either of these devices will do against smartphones. Is there still a substantial market for a single-purpose device, when you can get a smartphone that does everything you can think of at around the same price? Yes, the dedicated game devices have exclusive games, and deeper game play, and offer more power... but very few people are going to carry two pocket devices around with them all the time. And you'll always make sure you have your phone with you.

For kids, will parents buy them a dedicated game device, or one that they can use for school, communication, music, taking pictures, watching video, and games as well? Where the games don't cost $40 each?

I think Nintendo's got a reasonable price point for the 3DS now, and Sony's got a reasonable price for the power of their device. I'm just not sure there are enough gamers willing to spend the cash for those devices, when they can get gaming and a whole lot more with a smartphone. Yeah, smartphone games aren't as deep, you don't have the great controls... but they are cheap and there's thousands of them.

If Nintendo can't post some great sales of the 3DS this Christmas, I think Sony's gonna have a rough time selling PS Vitas next spring. Apple's new iPhone(s) are going to make the choices even harder. The new iPhone(s) will certainly be more powerful, which means even more powerful games could be played on it. Apple may also introduce an even cheaper iPhone that is still as powerful as the iPhone 4... which will attack dedicated handheld gaming devices at their most vulnerable point, pricing.

I would love to be surprised by a resurgence of handheld gaming this Christmas, but my prediction is that while Nintendo will do well, 3DS sales won't be stunningly high. The torch for handheld gaming will be passed to the smartphones, for better or worse.

Nintendo Gets More Bad News

Is this what the 3DS is turning into... the return of the Virtual Boy?

When it rains, it pours, doesn't it? Nintendo's been having  quite the bad news week lately, and here's some more for them. A Japanese games site surveyed 6,500 Japanese gamers about the 3DS, and the responses aren't the best news for Nintendo.

Over 30% of those responding who had already bought the 3DS felt "anger or regret" about the price drop, and the 20 free games seemed to do little to assuage their feelings. Overall, 49.4% of the 3DS owners surveyed said that the current available games for the 3DS were not adequate, and they felt "disappointed" with the system even knowing about future titles. More tellingly, 45.7% said they were not interested in, or on the fence about buying either Super Mario 3D Land or Mario Kart 7.

Of those who don't own a 3DS, only 5.4% said they were planning on buying one after the price drop. Most of those who weren't interested (65%) said they were looking at a PS Vita.

The critical pieces of information here are that half of all 3DS owners are disappointed in their purchase, and that only about half are interested in buying key new 3DS titles. No wonder sales have been poor, if half of the owners bad-mouth the device to their friends. Contrast this with the iPhone owners, of whom 95% or so are satisfied with their purchase. This data shows that Nintendo's problems with the 3DS will not be solved by a price reduction, even as big as the one they just made. The problem also won't be solved by new software, since the owners don't seem particularly interested in the new titles.

The poor battery life, the clunky appearance, and the fact that  the main feature of the device that Nintendo pushed so heavily (3D) is a disappointing gimmick that makes your head hurt, those are the 3DS's real problems. Nintendo can (and probably already is) engineering their way around the battery issue and the size and clunkiness. The 3D issue... well, that can only be solved with some great software that shows how good the feature can be, and how it can actually cause some excellent gameplay. I'm not sure if that's even possible, but that's what Nintendo has to figure out if they want this thing to sell. Otherwise they may have to just kill it, and come out with a revised DS that uses the faster processor with a better, non-3D screen, all in a small form factor with a 15 hour battery life.

Though until Nintendo embraces digital distribution, and free-to-play, and social gaming, and inexpensive game titles, I'm not even sure those changes will do the trick. Dedicated devices just tend to disappear when something more powerful and flexible comes along. The smartphones continue to zoom ahead, and they may be the end of dedicated  handheld gaming devices despite Sony and Nintendo's best efforts.We'll see... and watch carefully during this holiday season. If the 3DS can't make a solid holiday showing, it may never be able to make it.

Nintendo: 3 Scenarios For The Future

Since Nintendo's dramatic announcement of massive losses and a huge price cut on the 3DS, there have been plenty of articles posted on the Internet about what this could mean. Some writers are predicting doom, others say Nintendo is just in a rough patch and they'll be fine soon enough. Comparisons to Nintendo's previous venture into 3D gaming, the Virtual Boy, have reared their ugly head. What exactly will happen depends on what choices Nintendo makes in the next year or so, as well as the ultimate attitude of consumers towards Nintendo's decisions.

In classic think-tank style, I present three scenarios for Nintendo's future. Which one will occur? None of them exactly as I have outlined, I'm sure. But elements of all have some degree of likelihood... See where your vision fits in.

Scenario #1: Nintendo Triumphant
Nintendo awakens to the huge changes in the gaming industry. The near-death experience that 3DS sales underwent in its first full quarter and the complete failure of their expectations for the hardware and software cause Nintendo to re-examine every facet of its business. The public admission of problems and the huge price cut on the 3DS turn out to be just the beginning of Nintendo's re-invention.

Nintendo quickly diverted resources to building out its online offerings, using a sleek interface and integrating social networking. (Allowing you to use your Facebook signon was a bold move.) They reworked their developer program to make it far easier and almost free to become a developer, and removed restrictions on what you could offer; a wide range of DLC soon appeared and sold briskly. Freemium games and social games were soon to be found on the Wii... and when Farmville hit the Wii, hardware sales zoomed. The holiday price cut to $99 accelerated the revitalization of the platform, especially with its new range of apps available for free or inexpensive prices.

The 3DS was a hit once the price cut took effect and the new developer program really took hold. The crowning achievement, though, was Nintendo's strategic alliance with Apple. Bringing iconic Nintendo characters to Apple hardware was genius. The inexpensive, easy to play titles brought a whole new audience to appreciate Nintendo characters, and they could then buy Nintendo hardware to play those characters in premium adventures. Online notifications of matchmaking and leaderboards through social networking sites and smartphones added to the excitement building around Nintendo's networking and burgeoning gaming community.

The integration between Nintendo's hardware and Apple's made the whole process seamless. The Wii U launched with the capability to use not only Nintendo's controller, but an iPad or an iPhone or a 3DS. That, plus the ability to now access the full iTunes product line on the Wii U, made the hardware a hit from the start. Its $299 price point and advanced graphics, along with the ability to add a hard drive, made it a killer platform for the new media revolution.

2012 closed out with Nintendo reporting record sales and profits. It was hard to believe that people were once worried about the future of the company only 18 months before.

Scenario #2: Nintendo Muddles Through
Nintendo's huge mistake with the 3DS caused a sharp price reduction in the summer of 2011, which lead to a sharp growth in sales. It wasn't the 5x growth Nintendo needed to make their initial sales predictions, but it still rescued their relationship with 3rd-party developers. New titles for the 3DS brought sales to a higher level, and when Nintendo introduced a revised version of the hardware that was sleeker, lighter, and with longer battery life for the 2012 holiday, it looked as if the hardware would finally be a decent seller, if not a record-breaker. Nintendo's willingness to add some DLC and make some changes to their eShop certainly helped. They made some efforts to include social networking, claiming that they'd always been about networking. Nintendo continued to believe that their inherently high-valued games would differentiate them from the smartphone market.

The Wii U launch was later than expected, and the price point was somewhat high at $349, but the solid launch titles (including both Zelda and Mario titles) showed that Nintendo had learned their lesson about software. Still, sales were not up to the heights of the previous generation of consoles. Nintendo's fiscal year results for 2012 were solid, recovering from the 2011 stumble, but nowhere near the heady days of the Wii's huge sales rush.

Scenario #3: Nintendo Fades Away
Nintendo's poor 1st quarter performance was just the beginning of their woes. While they responded quickly with a sharp price drop for the 3DS, consumers did not respond. Sales moved up for a month, but by September they were leveling off at a new level of about 1 million units per month. Hardly what Nintendo was hoping for; they had to slash their earnings estimates once again, and they no longer had any illusions about being able to sell 16 million 3DS units by March 2012.

Christmas 2011 was a disaster for Nintendo. Refusing to drop the price of the Wii below $149, the hardware stalled as almost no new 3rd-party titles were shipping. Sony's PS Vita debuted to rave reviews, and it crushed 3DS sales over Christmas. The announcement of the Wii U price ($399) and ship date (June 2012) left fans feeling unimpressed, especially when it became clear there was to be no hard drive or any possibility of expansion, only one special controller could be used, and no good new controller for playing first-person shooters. Nintendo's attempt at GDC

Nintendo really was hurting after the E3 show in 2012 gave the new hardware so-so reviews. Most of the new software were ports of existing Xbox and PS3 titles, and they looked pretty much the same. Developers had found no really useful ways to use the new controller, especially since only one player could use one. The hardware launch was dreadful, as the new Apple TV and Google TV units (priced at $99) quickly ramped up to sales levels of 4-5 million per month.

Christmas sealed Nintendo's fate, as their hardware continued to perform poorly. Developers delayed or cancelled previously announced Wii U titles. Nintendo's shares tanked, and rumors swirled of a buyout offer from Microsoft. No deal was struck, and by February 2013 Nintendo announced it was exiting the hardware business for good. Henceforth, they would develop and market software for a variety of platforms. Their characters are remembered fondly but never excite big sales again.

Nintendo's Real Problem

Nintendo has some serious troubles right now, and the future looks more than a little grim. Since their apocalyptic announcement yesterday, a few more facts have emerged.

Item: Nintendo stock dropped 12% yesterday after the news hit, to end at 12,290 yen (about $160 per share). This is the lowest level it's been since 2006, before the introduction of the Wii. Now today it dropped to 11,100 yen, for a total drop of about 20% for the week; shares have dropped 50% since the beginning of the year. Not surprising since Nintendo slashed their earnings forecast for the fiscal year by 82%, with profits expected at the lowest level in 27 years.

Item: Nintendo's market capitalization dropped to an astounding 1.7 trillion yen, or about $22 billion US at the current exchange rate. Which is about in the low end of the range where Zynga's IPO is expected to bring in.

Item: The exchange rate for the yen hit a 4-month low today at 77.45 yen to the dollar, which only makes it harder for Nintendo to make money on products it sells in the USA.

Item: Iwata-san cut his salary in half, and cut other executive salaries by 20-30%.

Item: The price cut on the 3DS may mean that Nintendo is selling each unit at a loss. Reports on this are mixed, so take this one with some salt added. It's certainly true, though, that Nintendo is making far less on each unit sold than it was before the price cut. That $80 price cut means that Nintendo will have to sell at least 3 or 4 of its own software titles to make up the profit differential, and more of third-party titles.

Item: 3D is falling out of favor in the game industry. Here's what EA said yesterday, in a Gamasutra article:

Electronic Arts has seen poor returns when allocating its resources to displaying its games in 3D, according to CEO John Riccitiello, who says that the company would prefer to use those resources focusing on social features.

Speaking to company shareholders in a meeting remotely attended by Gamasutra, Riccitiello said that EA's business responds to the needs of consumers, and from what it has seen, consumers are not asking for 3D.


What does this all add up to? A very uncertain holiday selling season for Nintendo. They've pretty much fired off all their big weapons for the rest of the year, at least as far as price cuts are concerned. They certainly can't afford to cut the price on the 3DS any more, not when they are losing money on each one (or near enough to that). They have to sell enough volume of the 3DS to get volume discounts on the components, and perhaps do some re-engineering, to get the price down further. That couldn't really happen until 2012 sometime, and only if sales pick up significantly will Nintendo get some volume pricing.

Nintendo has one more price cut left for the Wii, to $99, and they may well play that card for the holidays. Wii sales have not been juiced much by the price cut; news of its replacement may already be affecting the desire to pick up the Wii. More importantly, though, is the complete drop-off in third-party Wii development. Basically, for interesting new Wii software it's Nintendo or nobody.

Can Nintendo rush the Wii U out the door? Not if they want to have a successful launch. Even if the engineering was far enough along, there's the little matter of launch software. Surely Nintendo learned from the 3DS launch how important it is to have some gotta-have-it titles when you launch new hardware. That whizzy 3D-without-glasses feature you that was enough to move hardware at a premium price turns out to be a gimmick with low appeal to gamers. Perhaps that may change, if someone releases an awesome piece of software that really shines in 3D and shows why it is a useful feature in a game. I doubt that will happen, though.

I don't expect 3DS sales to reach the levels Nintendo is hoping for; I would be astonished if they managed to reach their goal of 16 million units sold by the end of March 2012. I expect they'll fall short by millions. The Wii U will launch next year sometime, but I hope for Nintendo's sake they do a sensational job on the launch software. Even if they do, success is still iffy. The markets have changed; certainly 3 years in a row of falling console software sales should be enough to tell us that. The market for retail packaged software will never recover to its previous heights. This may not hurt a company like EA that is busy transitioning to digital distribution, but a company like Nintendo has come out repeatedly and says it doesn't think online anything is worthy of a big investment. That's not a winning strategy for the future.

Signs Of the Apocalypse For Nintendo

We gotta get out of here and look for customers!

I can't really say that I'm surprised that the Nintendo 3DS is continuing to not sell well. I thought, back before the launch, that it would have a good launch month and then sales would be mediocre at best. Here's what I said back in January:

The 3DS and PSP2 appear to good initial sales that quickly decline to disappointing levels. Partly because the price points will be so high initially. Once the fanboys have gotten their units, less fanatical customers will look at the prices and think about buying a smartphone instead. Many will. Developers in particular will be annoyed, because developing for these new handhelds will be significantly more expensive than the old handhelds, yet software sales will be worse. This will lead to a quick fall-off of third-party support.


Hmm, looks pretty much like what's been happening. I figured Nintendo would have to respond by cutting the price, but knowing how reluctant they are to do that I figured they would wait until just before the PS Vita release (say in November), then drop the 3DS to $199. But today the shoe has dropped, and it's a damn big shoe: Nintendo has dropped the price of the 3DS to $169, effective August 12.

Just so sales won't fall off a cliff between now and August 12th, Nintendo has also announced that current 3DS owners and those who purchase a 3DS between now and August 12th will get 20 free downloadable games between now and the end of the year. (Not that you get to choose which ones you get... Nintendo chooses them for you. They are old GBA and NES titles... good games, but I don't think it's enough to make anyone spend an extra $80 in the next couple of weeks to buy a 3DS.)

This is a stunning announcement from Nintendo that 3DS sales have not just been disappointing; they have been really, really bad. Nintendo usually resists price reductions with all their might; they refused to drop the price on the Wii despite months of falling sales, only caving when they went ahead and announced the Wii U. And they still only dropped it $50, to $149.

Here's the key info from IndustryGamers:

Nintendo has sold 4.32 million 3DS units since launch earlier this year, along with 13.96 million pieces of 3DS software. In the first quarter ended June 30, Nintendo sold 710,000 3DS units and 4.53 million Nintendo 3DS games.The new 3D handheld, however, has not met Nintendo's expectations. In fact, Nintendo largely blamed the 3DS for its poor first-quarter performance in which the company saw a net loss of ¥25.5 billion ($324 million) and sales drop over 50% to ¥93.9 billion ($1.19 billion) from ¥188.6 billion ($2.40 billion) a year earlier.

I guess losing $324 million in a quarter is enough to make even Nintendo sit up and take notice. Check out those sales figures; 710,000 units in three months, worldwide. That's not even 250,000 a month; and Nintendo still expects to sell a total of 16 million units this fiscal year, when so far they've only sold a little over 4 million? Let's see, that would mean sales would have to quintuple the current level immediately. OK, the price drop will certainly boost sales, but there's no way it'll be a 5x increase. I don't see Christmas sales making up the difference, either. Maybe Nintendo can sell a couple of million over Christmas, maybe even 4 or 5 million... but not 10 million.

Nintendo had been hoping that the arrival of the eShop and some software featuring key Nintendo franchises would boost sales. Clearly, those hopes have been thoroughly dashed. Worse news for Nintendo is that 3DS games are being cancelled (Mega Man Legends 3) or delayed (Metal Gear Solid: Snake Eater 3D). If the third-party publishers are already starting to vote with their development dollars, this platform could be in big trouble.

While Nintendo attempts to goose 3DS sales up into the 1 million a month category (which looks like a huge stretch goal), iPhones are selling at the rate of 7 million per month, and Android phones are selling at the rate of 15 million per month.

This does not bode well for the Wii U, either. Nintendo's got to make some more fundamental changes to their business model than just a price cut here and there, if they want to succeed in a fast-moving market.

3DS Sales Continue Slow

It's lonely here in 3DS land.

Nintendo continues to struggle with selling the 3DS. While they recently achieved the milestone of 1 million units sold in Japan, that's not something to celebrate for them. Why not? Because it took Nintendo far longer than they originally predicted to sell that number. Nintendo initially projected that they would sell 1.5 million 3DS units in Japan before the end of March. Instead, they've just now hit 1.06 million units, some three months later than they envisioned (and still 500K short of their goal).

Nintendo's hoping that the introduction of their online eShop, and some better games scheduled for later this year, will boost the sales. So far Nintendo has pooh-pooh'ed any suggestion that they might have to lower the price, especially with the PS Vita coming later this year at the same $249 price point as the 3DS. Sure, they can say that now, but if 3DS sales don't jump up in the next few months the question of a price reduction will surely be raised again.

It will be interesting to see if the Wii price reduction gives it a boost this summer. Nintendo may be getting just a tad desperate looking forward to the holidays if their sales picture doesn't improve by then.

I don't think 3D movies on the 3DS will be enough to save it... especially since 3D seems to be treated with increasing disdain by movie-going audiences, who rightly see it as an attempt by studios to justify higher ticket prices.

PS Vita (NGP) vs. 3DS vs. iPhone 4/5, Round Two

Now that Sony has announced the most important piece of missing information about their new console (The price, not the name), and we have some sales history of the 3DS to examine, it's time to revisit the head-to-head comparison of the three major contenders for the handheld gaming crown. I first examined these three platforms in this post, after Sony first announced their new handheld gaming device.

Let's look at the hardware specs first. The 3DS has a 3.5" 400 x 240 screen on top (that's 3D mode resolution; it would be 800 x 240 in 2D) and the second screen below is 320 x 240. The PS Vita has a single 5" screen with a resolution of 960 x 544. The iPhone 4 (and likely the iPhone 5) has a 3.5" screen with a resolution of 960 x 640. The PS Vita has the largest screen that's close to the highest resolution screen, which is the iPhone screen. The 3DS has the glasses-free 3D effect which none of the other devices have, but for about 15% to 25% of the customers the 3D effect either doesn't work or produces nausea and headaches, or is just unpleasant.

What about graphics performance? Clearly the PS Vita, with its quad-core ARM A9 CPU and Power VR graphics co-processor has the others beat. The iPhone 4 has a single-core ARM-based A8 CPU, but the iPhone 5 is likely to have the same A9-based dual core CPU that the iPad 2 has. It still won't be up to the performance of the PS Vita, but it won't exactly be a sluggard, either. The 3DS has some custom silicon in there, so it's hard to say for sure how it compares. According to this article, the 3DS can put out about 30 million triangles per second, about the same as an iPhone 3GS and slightly less than a PSP. Which means it's way, way behind a PS Vita or an iPhone 5, by about an order of magnitude I'd guess. The fillrate in pixels per second is about 1.6 billion for the 3DS, which is definitely better than the PSP at 664 million or the iPhone 3GS at 500 million... but certainly way behind the PS Vita or the iPhone 5 (the iPhone 4 has a raw fillrate of at least 700 million pixels).

Finally, there's the price point comparison: The 3DS is $249, the iPhone 4 is hard to compare since it's under a contract, but you can get an 8 GB iPod Touch for $229, and the PS Vita will be $249.

I have to say that the 3DS doesn't stack up well at its current price point. Certainly its sales have been weaker than Nintendo projected, and it's currently limping along at a fairly low level. Nintendo is hoping that some strong software titles and more marketing spending will bring up its sales, but I think Nintendo will have to cut the price to $199 before Sony launches the PS Vita, or shortly thereafter.

Nintendo's big edge with the 3DS was to have been the 3D effect, but that's gotten a mixed reception from customers. Even Nintendo has been busy de-emphasizing its importance. Without that, thought, the 3DS doesn't have any advantages over the competition aside from exclusive software titles. Which is no small advantage, as Link and Mario and Starfox and others are a huge draw. It may not be enough for Nintendo to overcome the hardware and business model advantages of iPhones, the PS Vita, and of course Android smartphones and tablets. There are far more mobile gaming options than ever before, and smartphones and tablets have a variety of other features that make them extremely attractive.

Sony seems to be working towards having a variety of inexpensive downloads for the PS Vita, as well as movies, and perhaps will be more open to other functionality. Nintendo has said they will have 3D movies available, but 3D movies aren't doing all that well at the box office either. The 3D fad may have run its course... which would be a bad thing for Nintendo since it planned for 3D to be the major selling point of the 3DS (hence the name!).

The iPhone (and Android smartphones) have suffered from a lack of top-quality games, but titles like Infinity Blade have shown that it's possible to do some very impressive games for the hardware. (And with Epic Games announcing they've brought in more than $10 million dollars from Infinity Blade, it's clear you can make real money from these games, too.) I expect we'll see more high-quality games for smartphones in the coming years.

Verdict: On the raw hardware level, the PS Vita has the horsepower, the biggest screen and the best array of features. The iPhone/iPod Touch has an impressive variety of apps, many of them free, and quite decent hardware performance even though it lacks dedicated gaming controls. The 3DS is bringing up the rear right now, but with better software and a lower price point it could be quite competitive. Nintendo may well release a sleeker, less expensive version next year, and then it will be a different story.

Sony Announces PlayStation Vita, Amazing Price

3DS, this machine's coming to get you.

Sony has announced the name for the NGP (Next Generation Portable): PlayStation Vita (pronounced VEE-ta). Yeah, I know, it sounds like something from Jersey Shore. Well, it's better than the Wii. Regardless of what you think of the name, though, the astonishing thing is that Sony announced the price: $249 for the Wi-Fi version, $299 for the 3G/Wi-Fi version.

Sony has thrown down the gauntlet at Nintendo's feet, pricing the PS Vita exactly the same as the current Nintendo 3DS. In a head-to-head hardware matchup, the 3DS pales in comparison to the gorgeous HD 5" OLED touchscreen, rear touch panel, dual analog controls, dual cameras, and amazing raw horsepower that puts it close to the PS3 in performance.

Given that the 3DS has not exactly set the world on fire with its sales or its features or its software so far, this is shaping up to be a real battle for the holiday season when the PS Vita finally ships. Nintendo has about six months to ship some really strong titles, encourage third-party developers to do the same, get some good marketing programs in place... and maybe reduce the price to $199 before the holidays. So far, the software for the 3DS has not been impressive, and the hardware is clunky, and customers don't seem to find the 3D effect more than a gimmick (and one that about 25% of the audience either can't stand or can't notice). I think the 3DS will have to be $50 cheaper than the PS Vita if it wants to be at all competitive. A better version of the hardware would be nice, one that was smaller and lighter with better battery life.

Sony's not ignoring the threat from smartphones, either, by making the PS Vita compatible with the PlayStation Suite for Android. Old PSP titles that were downloadable can play on the PS Vita, too. This all may not be enough to really deal with the threat of smartphones, but Sony seems to understand the nature of the problem, which is more than I can say for Nintendo.

It's shaping up to be an interesting Christmas this year.

3DS Will Outsell All Other Consoles in Japan?

Current 3DS sales figures make puppies cry.

In a rather bold prediction, video game publisher Enterbrain is claiming that the 3DS will outsell all other consoles this year in Japan, with a total of over 2.8 million units by the end of this year. Interestingly, they see the total 3DS sales dropping in 2012 to 2.475 million.

If you look closely at these figures compared to current 3DS sales, they would have to sell about 84% more than it's currently selling... every week for the rest of the year. Which seems more than a little optimistic given how lackluster 3DS sales have been so far. I really don't think a software title or too is going to make a huge difference at this point.

Of course, this just represents sales in Japan; worldwide sales would be perhaps triple that amount, maybe as much as 8 million units. To put 8 million units in perspective, that's about a month's worth of iPhone sales... or three week's worth of sales for Android smartphones.  Or  about two month's worth of iPad sales.

Perhaps you can see why I think smartphones and tablets are much more important to the future of gaming than the 3DS. A 3DS game by the end of this year might have 8 million installed units out there to sell to; an iPhone game or an Android game will have well over 100 million installed units to sell to. Heck, even iPads will have around 50 million in place by then.

So far Nintendo's stepped up the TV ads for the 3DS, but that doesn't seem to be moving the needle. I hope they've got some plans to reveal at E3 that will revive the 3DS, but I'm not expecting much.

Wii, 3DS Sales Dive

Mario may be flying off the shelves, but the 3DS and the Wii aren't.

Looks like Nintendo's got an even worse problem than they thought. Both Wii and 3DS sales have really tanked in April. How bad were the numbers? In April, Wii sales were 172,000 units, which was down 38% from last year and down 40% from March. Ah, you say, desperately seeking an excuse for the big N... maybe all console sales were bad in April? Nope. The Xbox 360 saw sales jump 60% over last April, to 297,000 units, and even the PS3 was up 13% to 204,000 units, despite a wave of bad PR from the PSN debacle.

The Wii is now safely ensconced in 3rd place, and unless Sony tries even harder to sully the PlayStation brand, that probably won't change. Looks like it's well past the time for a new console introduction... maybe Nintendo will want to speed things up a little and launch it by this holiday season.

Perhaps the 3DS will save Nintendo's profits and sales while the Wii sinks into oblivion? Not with a performance like April, with only 194,000 units sold in the month. That's less than half of what the 3DS sold in its launch week in March... about as grim a drop-off as you could imagine. Well, that was the US... maybe in Japan the 3DS is doing better? Hey, what about sales during the first week of May in Japan? That's Golden Week, a big holiday in Japan and usually good for some nice game sales.

Sorry to disappoint you, but 3DS sales were flat during Golden Week, selling just over 29,000 units. Meanwhile, the PSP sold nearly twice as many units as the 3DS, almost 55,000.

Nintendo' sgoing to have to pull some rabbits out of its hat at E3 to keep the rest of this year from being pretty dreadful. Wii at $99 by Christmas?

3DS Sales Still Weak

3DS sales are moving about this fast.

If you were wondering about 3DS sales, wonder no longer. It wasn't just a temporary glitch. The 3DS is being regularly outsold by the PSP in Japan, with the PSP hitting almost three times the sale of the 3DS. True, the PSP is half the price... but it's been on the market for many years.

The PSP sold almost 80,000 units compared to the 3DS at 28,000 units. In case you're wondering, the DSi LL sold a little over 9,000 units, and the DSi sold about 7500. These are really not good numbers for Nintendo. It's partly reflective of the lackluster launch titles, to be sure. But who's to blame for that? Nintendo should at least have been able to control the software titles they did in-house, and delayed the launch of the 3DS until they had at least one killer title for it. Nintendo made a huge mistake in rushing the 3DS out before it was really ready. Why would they do it? Because they saw their sales for the Wii and the DS line sinking fast, and felt they had to do something to brighten the sales picture a little (even so, their sales were down 29% for the year, even with the launch of the 3DS in there).

Nintendo was in this pickle because they refused to lower the price of the Wii last holiday season, figuring that they didn't need to. Similarly, Nintendo felt that initial reaction at the last E3 was so strong for the 3DS that they didn't need to market it, or wait to launch until better software was available. Bad choices, obviously.

I'm sure Nintendo's hoping that Ocarina of Time and other titles coming soon will revive sales (that, and some actual marketing efforts... maybe an ad or two, Nintendo?). I think they're still missing the larger industry trends, which are moving away from the directions they are going.

And, by the way, 3D is not a must-have for everybody. Not in movies, and not in games. At least Nintendo has admitted that... now. Not the same thing they were saying before the 3DS launch, but I guess they have learned something.

Nintendo Admits 3DS Sales Disappointing

Not an actual Nintendo ad from TechCrunch. But it should be.

Nintendo has finally admitted what has been obvious to industry observers for some time: 3DS sales have been disappointing. Or rather, they've pretty much slowed to a crawl since the initial launch got all the fanboys to buy one. Now less enthusiastic fans are looking at the hardware, and the price, and the games, and apparently managing to restrain their enthusiasm.

At least Nintendo has figured this out and deigned to admit it. Of course, Iwata-san deflects the blame onto the users, who for some reason just haven't grasped the wonderfulness of the device. At least he's figured out the answer: A marketing campaign to explain the benefits. One wonders why they didn't think of this before. I suspect Nintendo had actually believed all of the enthusiasm expressed by industry types and the press at the last E3, and figured that the 3DS was going to sell itself without the need for spending money on marketing.

Nintendo miscalculated, and badly. Where did they go wrong? I think this is a result of the smartphone/iPod effect that Nintendo has been trying to say has no effect on their business. Quite the opposite is true; smartphones are having a devastating effect on their business. When you can get an iPhone 4 or an iPod Touch for less than the cost of a 3DS, and then have a much more versatile piece of hardware with thousands of low-cost or free games, that's got to affect your sales. Charging $40 for lackluster launch titles hasn't helped, either.

Yes, there are really not too many excellent iPhone games out of the thousands available... but how many 3DS games are there? How many good iPhone games can you get for the price of one 3DS game? About a dozen. Sure, it may look a little different when Nintendo gets some better games out, and the eShop appears... but not significantly. Nintendo still doesn't grasp that they would have to drastically open up their development model, encourage non-gaming applications, and significantly improve the price/performance of their hardware to compete.

Nintendo thought that 3D without glasses was all they needed. Turns out it's more of a gimmick, and not one that's selling hardware for them. They still have to come up with some strategy to sell the 3DS; let's see what they have to say at E3. Although they may be spending most of their time pushing their new console (The Stream? The Wii 2?), which ultimately may meet the same fate as the 3DS. Lots of enthusiasm among the industry execs who hope it will save their fading business models, but when it finally arrives the high price will not be appealing to people playing games on their Google TV and Apple TV. I think we are witnessing the extinction events of the console era.

Nintendo is introducing new models of dinosaur ("Look! Improved scales, bigger teeth, more sheer tonnage!") while newly evolved little mammals are running around eating their eggs and occupying their ecological niches. "Those mammals are so small and scrawny! They'll never amount to anything! How can they possibly threaten us?" To misquote a popular game meme: They're in your base, killing your profits.

Marketing may help delay your extinction, but nothing less than a fundamental shift in your business models will save you, Nintendo.

Game Development Costs Triple for NGP, 3DS

Angry Birds plush toys at an open-air market in Seoul, South Korea.
I don't think these were authorized, but I wasn't able to ask.

One of the key "features" of new consoles, handheld or otherwise, is not readily apparent to consumers, but it's very important to developers. New consoles inevitably result in a rise in development costs. It's a consequence of higher resolution graphics, which require more time spent on art, and of the sheer difficulty in learning to use a new console. Not to mention working with a tool set that's inevitably incomplete and bug-ridden. At the earliest stages there are no third-party tools to switch to; you're reliant on the tools the console manufacturer gives you.

More than that, when the console maker throws in new features like 3D or various sensors or motion control, or even added buttons, it all takes time for developers. They have to spend time experimenting with the new features, learning how they work, and hopefully coming up with useful and fun ways to use the features in a game.

How high are we talking about? Game budgets for the 3DS and the NGP are expected to be over $1 million dollars. That's your price of entry... so you can see why a small developer used to iPhone games might balk at the idea. As a contrast, Angry Birds cost $140,000 to develop, and that was considered a very high budget for a smartphone game. Many smartphone games from small developers are costing thousands of dollars to develop, and even then many don't make back their investment. Which is why independent developers need to tread carefully when deciding on budgets for their games.

And clearly, if you are thinking about bringing your smartphone game to the 3DS or the NGP, you'd better have a lot of resources handy... And a great deal of confidence in how many copies you can sell.

3DS Sales Lower Than We Thought

"C'mon, Luigi, we gotta get outa here before sales collapse-a completely!"

Nintendo finally announced 3DS sales in the US for its March opening... 400,000 units, which was less than the low end of analyst estimates (which were 500,000 to 750,000). This means the 3DS saw a grand total of just over 1.5 million units in sales from launch in Japan to the end of March (which then included US and European sales), against their forecast of 4 million units. They hit about 40% of their forecast numbers, in other words. You can argue about sell-in predictions versus sell-thru numbers, but the truth is Nintendo would rather have had empty store shelves at the end of the weekend with customers hungrily demanding more. Product shortages make a great PR tool.

Nintendo could have easily not shipped quite so many units to retailers in order to create an artificial scarcity; this has happened many times in the history of game hardware. But retailers want to have lots of units on hand to make sure they can maximize their sales, as they don't want sales going to some other retailer. Both the retailers and Nintendo were convinced there was plenty of demand, so Nintendo supplied the channel with as many 3DS units as they could. This time, though, the strategy has backfired. Sales slowed down dramatically in Japan after the opening week, and similar slowdowns have been reported in US retail channels.

The Nintendo DS family outsold the 3DS, with 460,000 units sold in March. Ouch. Certainly price point had a lot to do with this.

I'm already noticing more 3DS ads on TV, as Nintendo is probably ramping up to try and rescue the launch as much as they can.  Look for more PR about upcoming titles for the 3DS, and they may stage some events in May to go along with the eShop release, the Netflix functionality, and the free AT&T hotspots showing up. I expect Nintendo is pulling out all the stops it can so that E3 will be a success, not a disaster.

There are two E3 scenarios Nintendo must be looking at right now:

1) Everyone at E3 is wondering if Nintendo will be able to stop the hemorrhaging, as sales of the Wii and DS lines continue to drop and the 3DS continues to underperform. No big announcements at E3 have people wondering if Nintendo can ever recover.

2) Nintendo clearly wins E3, riding high on a resurgence of 3DS sales, the newly invigorated Wii sales after the May price cut, and an enthusiastic response to the announcement of new console hardware for 2012. Microsoft and Sony look old and busted as they plan to stick with their consoles for years to come, while Nintendo outstrips them with powerful new hardware and a slew of must-have product announcements.

I think Nintendo is gearing up for Scenario #2, after recent events have shown that Scenario #1 was looking more and more likely absent some dramatic moves on Nintendo's part. I think Nintendo would be wise to use everything in its arsenal right now: Price cuts on the Wii, more marketing efforts, key software announcements, and new console hardware on the way. If they really want to rule, try shipping the new hardware by Christmas 2011 instead of sometime in 2012 (though it would be difficult to get any third-party software for it on a short time-frame, unless it's been worked on for months already, which I doubt).

3D Display On iPad 2: Games Next?

I'm definitely seeing gaming possibilities jumping out at me... 

OK, this is just too cool. Some clever guys in France figured out this neat gimmick that uses the front-facing camera on the iPad 2 to do head-tracking, and thus shift your perspective to do a pretty effective simulation of a 3D screen. Check out the video:

If you don't see that games are the immediate and obvious application, you must be reading the wrong blog.

This could be very interesting if someone actually builds games around it... a large screen 3DS, if you will. Super Monkey Ball 3D would be an obvious one for this.

It's also worth noting that Apple is expected to move around 40 million iPad 2's this year; latest analyst projections for the 3DS say 11 million units for the year. Hmmm... Which one would I rather develop a game for?

3DS: Hit Or Miss?

Actual image of Nintendo's sales projections about to bite Reggie in the ass.

I'm back home after nearly a month of voyaging through China, South Korea, Taiwan, and Japan. I have many interesting things to write about from my travels, but I also have to catch up on events that transpired while I was voyaging. So there will be a rather interesting mix of blog posts in the days ahead... while I also get going on a number of new projects. I hope the blog posts I put together before I left were enough to keep your interest; they were perforce less immediately topical since I had to write them weeks in advance. Still, it's nice to see that my page views continue to grow by double-digit percentages even when I'm not around to push things hard. Thanks for all of your support and continued spreading of the word about this blog.

On to the subject of this post... Nintendo and the 3DS. The 3DS launched in Japan on February 25th, and in the U.S. (and Europe) on March 27th. While it's still far too early to call the long-term success of the new handheld, we can look at how the 3DS has done so far against Nintendo's projections and general expectations.

Nintendo's projections called for 4 million sales of the 3DS worldwide in the month plus a few days from the release of the system until the end of their fiscal year March 31. What's the reality? Nintendo sold about 836,000 units in Japan, 303,000 units in Europe, and there's no details on how many they sold in the USA... but they only expected to ship in about 1 million units to the US, and reports are that there was plenty of stock left on store shelves after the launch. So, being generous with US sales, we end up with somewhere in the neighborhood of 2 million units sold worldwide in the first month and a bit... which is about half of what Nintendo was projecting.

Nintendo's trying to polish up that smelly fact by touting the first day sell-in numbers, but it's still not equal to the PSP's first-day sales. Adding insult to injury, the 6-year-old PSP outsold the 3DS in Japan last week by 15,000 units.

So the results are in, and the 3DS has by any reasonable assessment a disappointing launch. When you miss your sales target by 50%, it's time to polish up your resume.

What went wrong? A number of things that I can see, and some of those are shared by others. I think the hardware is expensive at a time when economies are still lagging, and there's no killer launch title. Hell, there's not even a really good launch title. No Zelda? No Mario? Donkey Kong? Star Fox? Anybody from Nintendo's all-star roster? You'd think they would have planned at least one gotta-have title for launch time.

The system is still missing some good features, like the new eShop and Netflix. I'm still amazed at the very lackluster marketing effort Nintendo put into this. TV ads? Nope. Not even a PR blitz of any great note. It's as if they were so overcome by the praise at E3 they figured they didn't have to put out much in the way of marketing dollars. Hmm, I guess we see how well that worked out.

Nintendo can still pull out of this and have some good sales. They'll need to really spend on marketing, and dropping the price would sure help. They absolutely will need some killer software to appear as soon as possible. I realize they can't overcome the hardware problems so swiftly (3-5 hours of battery life? Really?), but a hardware update has got to be in the works for next year if they really want to replace the DSi.

This just shows how much work Sony has ahead of them in order to make the NGP a success. That beast is going to be even more expensive than the 3DS, at least from the rumors, and that's going to make it a tough sell. I think Sony can execute better on getting some must-have software out with the system, and certainly their digital distribution will be far better than Nintendo. It still won't be easy.

I'll be very interested to see at this year's E3 if Nintendo has some substantive efforts to improve 3DS sales, or if they will just try to spin the disappointing facts into something more palatable. It will be interesting, too, to see if third-party support for the 3DS gets a little less enthusiastic with these sales numbers. It's not another Virtual Boy, but it's certainly leaning more in that direction than in the DS direction. It's time for Nintendo to get serious about making the hardware successful.

3D on 3DS: Fad?

How easy will it be to lose your stylus? Too easy.

I'm not the only one who finds the 3D on the 3DS an interesting gimmick, but not something for the long term. Brian at Kotaku has turned off the 3D after a week and is just using the 3DS as a standard handheld... albeit one with crappy battery life and expensive software.

My experience with the 3DS was that the 3D effect gave me a headache after 15 minutes of use. Plus, trying to move the 3DS in order to get the right angle on a target (using the position sensors) and at the same time trying to keep your eyes in the limited sweet spot for 3D was a losing proposition. Even without that, the fact that you have to switch your focus between the 3D screen and the touch screen means your eyes and brain will get tired swiftly.

So maybe it's a good thing the battery doesn't last too long, because then you'd get a headache for sure. Hey! Crappy battery life is a feature, not a bug! Why didn't I see it before?

Nintendo is going to be hurting if the 3DS is not the huge success they are banking on. The Wii is tanking, and although they may have a successor in the wings it's not going to make a big fiscal impact this year (or else they'd have already announced it).

The real test is to see how 3DS sales look in the summertime, once the initial bloom has worn off. And when the NGP gets closer... and the iPhone 5 is announced... the competitive picture will be heating up. Let's not forget the Experia Play (the Playstation Phone), the iPad 2, and 3D smartphones... there are many ways to compete for gaming time and hardware dollars. Nintendo's got the biggest challenge on their hands that they've ever faced, and yet they still seem to be dismissing the difficulty level. This does not fill me with confidence for their chances in the coming battles for handheld entertainment.

GDC Day 4

The most popular way to get attendees to visit a booth at GDC.

Today was a day for the Expo... in between meetings and random encounters. And missing some of the people I was hoping to find... but they'll turn up sooner or later. The Expo was an intense experience, with crowds of people, brightly colored booths with billions of polygons and technology oozing from every port. Here's some impressions of what I saw today:

The Nintendo 3DS. I finally got a chance to play with a 3DS and see some of the titles coming up for it. A very nice 3D effect without glasses... as long as you keep your eyes in the sweet spot. The movie clip produced a good 3D effect. I tried a couple of the built-in Augmented Reality (AR) games, which used the 3DS cameras to view a card on the desktop to create a dragon that you could shoot at by moving the 3DS around and pressing the button. Another game took a picture of your face and mapped it onto targets... rather disturbing I think.

Overall, the 3DS felt heavier than a DSi, and the controls seemed sturdy. The 3D effect worked well, but after playing for 15 minutes I found I had a headache. I think it's a nice device, but I am still unconvinced that the market will embrace the device the way it embraced the DS. There are some significant limitations, such as the battery life (3-5 hours versus 15 or more), the $250 price tag, the high cost of the games ($40 or more) and the still-feeble embrace of digital distribution and its possibilities. In a market where smartphones will be selling in the hundreds of millions, the 3DS will  be lucky to achieve a significant fraction of their market share.

What could Nintendo do better? I'd say bring down the price to $199, and embrace digital distribution for a wide range of price points. Open it up to developers and a wide variety of apps. I's screens would still be far lower resolution than a smartphone, but at least it wouldn't have such a glaring disadvantage in software distribution.

The Sony Xperia Play. In stark contrast to the 3DS is the new "Playstation Phone" from Sony Ericsson. I had seen pictures, and it looked pretty cool... but holding it you're struck by how incredibly thin and light it is. And speedy... with a gorgeous screen. Android powered, and a set of Playstation games included, with more on the way. Makes the 3DS look clunky and underpowered and kinda ugly. Frankly, I'm not enamored of 3D. Nintendo's tried to make it important as a gameplay element, but it's unclear how many games will really do that. And the headaches may be more prevalent than Nintendo would like. The Xperia Play is a worthy phone to carry, and a great gaming device.

Middleware, Payments, Cloud Computing... All of these had multiple booths for a variety of vendors. I took a variety of literature, but really reporting on these things will require some review. There seems to be more ways than ever to get paid for your games, and to have your games hosted, and to have various sorts of services connected to your games. The part that I really don't understand is booths seemingly devoted to obscure Chinese MMOs. Other other foreing games... why have a booth at GDC? What do they hope to gain? I'll try to find out tomorrow, because I'm curious.

One interesting note: The most popular prize for giveaways at booths seems to be an iPad... with a few bold booths offering an iPad 2. Of course, they're only giving away one to a booth... but there are a half dozen booths where you can find this offer. Interesting that they would presume attendees at GDC to be interested in this item... and I think they're right.

Right now I want to spend some time watching the League of Legends tournament being staged for the GDC Conference Associates... my son is competing. More tomorrow.